Not long ago, Vladimir Putin told an assemblage of foreign executives that Russia was a great place to invest. How great? Well, don’t ask Mikhail Prokhovrov. Prokhorov made the mistake of getting enmeshed in the machinations of Kremlin political technologists, and had the temerity to show a smidgen of independence. Bad idea. So now Putin is sending Mikhail a little reminder of how tenuous his fortune and his empire are:
A delay in allowing billionaire tycoon Mikhail Prokhorov’s gold firm Polyus to sail into the prestigious FTSE 100 Index, while probably procedural, leaves nagging concerns that politics and business in Russia make for a dangerous cocktail.
The postponement, ordered by a committee chaired by Prime Minister Vladimir Putin, comes just two months after Prokhorov’s sudden exit from Russian politics following an acrimonious clash with the Kremlin.
In his brief foray into politics, Prokhorov had hoped to lead a liberal party that enjoyed official backing into December’s parliamentary election, but his autonomy and ambition unnerved Russia’s leaders and he was abruptly ousted.
Putin’s announcement that he will run for a third term as president in 2012 has reinforced concerns amongst Russia’s super rich that they own their assets at the pleasure of the country’s rulers. Prokhorov’s fortune has been estimated at $18 billion by Forbes magazine.
“The power is such that nothing is really safe,” said one industry source.
Nice little gold company you got here, Mikhail. Pity if something happened to it–or to you. Mikhail. That name sounds familiar–just like Mikhail Khodorkovsky, no?
Need another example? How about more travails for BP? TNK-BP is continuing its efforts to torture the British supermajor: its management board is recommending that the full board vote to join in a shareholder lawsuit against BP for its attempt to deal directly with Rosneft:
But the legal net is tightening around BP after TNK-BP’s management recommended its main board discuss filing suits claiming billions of dollars in damages over the failed Rosneft bid.
The disclosure, which came on the eve of BP’s third quarter results, looked aimed at raining on the UK oil group’s parade as it seeks to turn a corner following the Gulf of Mexico disaster and the botched Rosneft deal.
The move looks likely to pose a serious new headache for the group, which is already battling a slew of lawsuits over the Rosneft bid claiming it breached a shareholder pact granting TNK-BP the right of first refusal to any new venture in Russia or the Ukraine.
So go ahead. Be a sucker. Listen to Putin’s blandishments. Fools and their capital are soon parted.